Cramer: Sing It, Martha -- Nowhere to Run to in This Market, Nowhere to Hide

 | Oct 11, 2016 | 2:44 PM EDT
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Something has to go right or we get stuck with a day like today where only rumors of a deal for Twitter (TWTR) and an explosive situation behind Apple's (AAPL) run create buying opportunities.

Everything else is for sale.

Why is that?

I think lots of what happens in this market is that because there is no new money coming in, courtesy of the discrediting of the asset class, it just sloshes all over the place. However, on a day like today, there is nothing to slosh to.

I can demonstrate this simply by going over the big groups in the stock market to make it clear that, as those great stock seers, Martha Reeves and the Vandellas, told us that, for at least today, there's "nowhere to run to, nowhere to hide."

Let's start with the biggest of the selloffs, the drug and biotech stocks. These declines take your breath away. How in heck can the stock of Gilead (GILD) have fallen $28 from $102 to $74 despite making fortunes on its hep-C cure? This stock is selling at 6x earnings, for heaven's sake. The answer? Why is Celgene (CELG) , with so many irons in the fire, getting crushed, down another $2 and change? There goes Regeneron (REGN) , selling off another eight points, as has been the case pretty much for over a year now when it traded at $596. It now resides at $386, despite having new drugs with smashing sales.

I think the answer is one that I almost hesitate to give because it touches the third rail -- politics. But there is a growing belief that the Republicans could lose both the House and Senate because of issues at the top of the ticket. If that is the case, then you can bet that Hillary Clinton's bite could be every bit as bad as her bark and we will have some scheme of an undetermined but disconcerting nature involving drug pricing. So the market is saying, or I should say, screaming, that it will not pay as much for the drug stocks as it would before when the Republicans could block Hillary because the uncertainty and consequences could be too great. We go from a situation where the president has a bully pulpit to where she can bully a whole industry around. That's not something that makes me want to buy these stocks on the way down until after the election.

Oh, and it doesn't help that Illumina (ILMN) , which makes instruments for the medical industry, reported a huge shortfall last night, sending the stock plummeting and causing tremendous angst for those who own medical-device stocks. A faulty battery situation among implantable devices made by the soon-to-be-acquired St. Jude Medical (STJ) didn't help the cause.

How about the industrials? You know I always say you can judge the industrials by what Alcoa (AA) has to say because it has its products in so many different markets. Well, if you judge by Alcoa, then you are seeing a slowdown in pretty much every industrial market save autos, with trucks and aerospace really getting hammered. I spoke with CEO Klaus Kleinfeld this morning about the aerospace weakness, so important to the new Arconic, the Alcoa spinoff that includes proprietary engineering that makes a huge amount of parts for aircraft, and I got that there are teething issues. Got it three times. Given the slowdown in orders, people have to wonder whether it's teething or a "knock your teeth out if you own it" blow.

I actually buy into what Kleinfeld said and urged members of my Action Alerts PLUS club to take advantage of the weakness and buy it even as my charitable trust is restricted in the name because I talked about it. Alcoa's split into two entities -- commodity and specialty aluminum -- will bring out huge value and in the interim the expectations are totally wrenched out. 

That said, the reverberations are being felt across the board with the aerospace-related companies, like Honeywell (HON) , Eaton (ETN) , United Technologies (UTX) and Boeing (BA) all seeing their stocks clobbered. Alcoa cast a pall on the international cyclicals and it would seem to be worth more than just a one-day decline, although I actually like Alcoa better than all of those other stocks because it is a special situation on account of its breakup.

We have defaulted so often to the packaged-goods companies in times of trauma like today. But they sell a huge amount overseas and the dollar's been too strong and their yields, which often protect the downside, don't do much when interest rates are going higher as they have been. Not a safe haven.

How about the banks? They start reporting this week and we didn't get a rate hike. That means the banks can't be as bullish about their quarters or their futures. The stocks look cheap, but that's not enough for this gigantic group.

Same thing goes for the real estate investment trusts and the utilities. You don't want to own them when rates are going higher and they seem to inch up by the day. Too much competition from risk-free instruments really hurts the cause.

Oils? They need oil up every day to move up. I think tomorrow we might show a big oil inventory drawdown, but in the interim you can't buy these stocks if oil loses its momentum.

Retail's tough. So are restaurants. The consumer isn't spending as she was even three months ago. Everyone's suspicious of the group.

Which brings us to tech. I like tech. Like it a lot. Facebook (FB) , Amazon (AMZN) , Netflix (NFLX) , Google (GOOGL) -- let's just stop it with the Alphabet already -- have been great places to be. But in a general selloff, they just don't work. You have to wait until things calm down before you can do some purchasing if only because they have run so much. (Apple, Alcoa, Facebook and Google are part of TheStreet's Action Alerts PLUS portfolio. Amazon is part of the Growth Seeker portfolio.) 

I continue to like any company that tries to dominate in social, mobile, the cloud, the Internet of Things, artificial reality and augmented reality and virtual reality. That's why I still like Salesforce.com (CRM) , which opened our eyes to still more of the future of all these important initiatives. I do not blame Salesforce for one minute for coveting Twitter now that its stock has sunk eight points from where it was. But much has to happen to make a deal occur. Twitter must lower its price to something well below $29, which had a decent ring to it when Twitter was at $24, but not at $17.

Salesforce needs to find a deep-pocketed partner that can help defer the cost. Twitter has curtailed development, which has hurt the user experience and has led to adding only 9 million followers in the last year during a period where Facebook added 150 million.

Still, it does fit the paradigm of what is working and what will work provided you are willing to take some pain as today's a day where pain's being dolloped out. At least with tech you know the trends produce wind at your back, not in your face.

Now, with every tough day comes a silver lining. While there is usually nowhere to run and nowhere to hide on day one of a big selloff, on day two you begin to see bargains in all these segments with the latter, tech, giving you the most bang for your buck.

That's important to consider because otherwise you would think with the S&P 500 selling off badly and at a three-week low, "Who needs this?" The answer? Someone who wants to make money a little longer term, that's who.

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